Every business deserves great sales leadership. That holds true for start-ups as well as small-to-medium-sized companies that are ready to make the leap to another 10 or 15 million dollars in sales. Perhaps a fractional sales leader is the answer.
The difference between sales management and sales leadership is not subtle. You must understand the difference because you want to hire a leader for your sales team.
The problem is that these companies can’t always afford to hire a full-time sales leader. If they do, then the job is split up between sales calls and leading the rest of the sales force. That’s not always a great solution.
“Fractional sales leaders are a question of financial viability,” Vendux co-founder and managing director Henning Schwinum explained on this episode of the Publio Podcast.
“Small businesses and startups are cash poor by definition and should not ever waste resources. Founders and owners have to look for the best places to spend their money for growth.”
For Schwinum, the question is how much of that leadership resource do you need? In a former role as a “full-time” sales leader with three direct reports, he spent 80 percent of the time as a salesperson with a glorified title.
“From the company’s perspective,” he recalled, “it would’ve been a whole lot better to contract my skill set for the 20 percent of the time where it was needed. The rest of the money could have been used to hire two other full-time sales reps. That company would have gotten a whole lot more in return.”
Schwinum’s company places seasoned sales executives in interim, or fractional, roles to help companies grow.
Thing 1: How to Structure a Fractional Sales Leader’s Compensation
The answer is dependent upon the maturity of your product and your market, as well as the length of your sales cycle.
Schwinum used an example of a pre-revenue company. You will need a sales executive who will lay the foundation, build the sales process, and write the playbook and the messaging. This person may even make the first two or three sales to test the process before you hire sales reps and build the team.
In this example, Schwinum pointed out that a commission structure for a fractional sales leader is not practical. You will most likely negotiate a fee that includes a success bonus. If you have an established sales process and you can show how success leads to a certain income, then a commission structure makes sense.
“In between these extremes,” Schwinum pointed out, “fractional sales executives are open to a compensation mix between fixed, variable or equity.”
“Business owners have to be a lot smarter in evaluating success.”
Thing 2: What Skill Sets Should Your Fractional Sales Leader Have?
Sales is all about variables, which is why the sales leader you bring into your business should have experience with your particular situation. These situations include startups with no sales history, as well as established businesses that want to grow in new or mature markets.
“I’ve encountered companies with several millions of dollars in sales, but don’t have a customer relationship management system in place or any real sales process,” Schwinum said. “Other companies can’t get out of the starting gate without these systems in place.”
When he engages a client, Schwinum discusses the company’s current state, and the goals the founder or CEO wants to achieve over the next several months. Are they missing necessary technological tools? Do they need to build a sales process? Do they need sales development representatives who can get leads?
“I place executives who have already achieved the client’s specific goals,” Schwinum said.
Which is to say: The right fractional sales leader will be well-positioned to provide great leadership.
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